–Adds Detail, Quotes To Version Transmitted At 1123 GMT
–Bullard: Not Obvious We Have To Do A Lot Right Now; Could Wait and See

LONDON (MNI) – The decision over relaunching quantitative easing at
the Fed’s November meeting is a “tough call”, and things can change
between now and then, James Bullard, president and CEO of the Federal
Reserve Bank of St. Louis, said in a CNBC interview.

Bullard said extra QE was “not a slam dunk”, in basketball
terminology, and the Fed members still had to rework their forecasts
before the November meeting. He said the FOMC could take the view it
would postpone a decision on more QE until December or January.

Bullard described more QE as a “tough call” and asked to amplify on
this view said “I think it is. Just trying to be as clear as I can be
about it.”

The markets are currently attaching a high probability to further
QE in November, but Bullard injected a note of caution.

“We have got some time between now and the meeting. Things can
happen, data comes in. All of us have to redo our forecasts, including
me, I haven’t done it yet,” he said.

Bullard acknowledged that there was a risk the Fed could overdo it
with QE and that there was a risk it could reignite inflation.

“This is unchartered waters… (inflation) may get away from us if
we are not careful,” he said.

“It (more QE) is a tough call because we did hit this soft patch in
the economy but it is not so soft that it is obvious that we have to do
a lot right now,” Bullard said.

“It is still possible to make the case that the economy will
improve naturally on its own in 2011 and that we’ll have faster growth
and that we’ll get inflation closer to target in 2011 without taking all
these risks that come with expanding the balance sheet further,” Bullard
added.

Bullard said if the FOMC took the view the economy could improve
unassisted, it could effectively postpone a decision on QE.

“The natural thing for the Committee to do if it felt that way
would be just to say ‘Well, we’ll just wait until the December meeting
or we’ll wait until January until we have more data on the economy.” he
said.

“That is a common thing the committee might do,” he added.

–London Bureau; Tel: +44207862 7491; email: drobinson@marketnews.com
dthomas@marketnews.com

[TOPICS: MMUFE$,MT$$$$,MI$$$$]